Athletes, actors, singers, celebrities…all of these stars are generously paid for their work they do. Surely, they deserve the wages they earn in their respective jobs, because they use to be persons with one of more extraordinary skills, and they also generate much money to the stakeholders of disparate related industries. The money they earn when they endorse a brand, however, does not produce any benefit for anyone but themselves. It is money that only increases their accounts, which often are yet widely fattened (again, surely they deserve it). The great amount of money stars receive from brands increases the final price of the product, so companies have incentives to reduce productions costs in order to keep a market price. And such reduction of costs is often charged to workers salaries and to worsening their labor conditions.
If stars renounce to the money obtained from endorsements but they continue endorsing the brand, and if that money is transferred to workers to improve their labor conditions, then they will sacrifice only a “bonus” for their excellent work, which really is the money coming from brands. But this sacrifice will produce a huge impact on the quality of life of hundreds of modest workers, their children and their whole families. And they will help to aware consumers and society about the importance of living wages.
This generous action of stars will increase their brand image, and they will help them to be viewed as a conscious celebrity, which also will probably help them to obtain more endorsement deals. But the most important, they will have the opportunity to directly make something extremely valuable for many people working in undesirable labor conditions.
Why not to focus on other sponsoring activities?
If companies expend less money in marketing they could pay much more to workers and they could sell the products at the same price. It seems a very simple reasoning, a straightforward equation.
Although this could be an interesting option, it has a side effect; several modest people and companies which obtain some profits with the development of the industry related to the sponsoring activity could loss those benefits. For example, when a giant shoe company sponsors a football team, this money not only helps to expand the team operations (which it is also good for team workers), but it also helps to the development of the global activity of football where many small businesses and workers have economic interests. We do not want to promote undesirable side effects; therefore we encourage brands to continue investing in marketing activities.
An example of how a start can help
It is difficult to estimate the percentage of the final price of a product that is assigned to the wages of manufacturing workers. The Clean Clothes Campaign estimates a 0.5% in the worst scenario and 5% in the best scenario. Companies use to obtain an operative benefit (before considering taxes and extraordinary costs) of around 10% of sales, although this number is highly variable depending of, for example, the sponsoring and advertising pressure of each brand achieve in function of its marketing objectives.
It is very difficult that a donation goes directly to workers. Organizations use the donations to add pressure to brands, to work with trade unions, to help in legal disputes, etc. Obviously it would be fantastic if the money could go directly to increase the wage of workers but it is very difficult to obtain such direct effect. However the indirect effect we is undeniable. All the pressure put to brands, all the work with trade unions, all the support in legal disputes… indirectly improves the labour conditions of workers.
In countries when such workers gain only a few dollars per week (often suffering hard labor conditions), that improvement would suppose a huge change in their quality of life, and the quality of life of their children and families. Evidence has shown in the last years that indirect effects have yielded undeniable progressions, and provided “victories” to workers. However, the situation is still dramatic in some cases, and should clearly improve in many others.